24 August 2000Alitalia is the latest airline forced to react to the extra costs of jet fuel by suspending services to Sydney and Bangkok.
The move to suspend the services from the end of October comes only four months after Alitalia returned to the Australian market following the collapse, of its proposed merger with KLM.
Along with Bangkok and Sydney, Alitalia is also suspending services to Addis Ababa and Nairobi, at the same time lifting fares by three percent,
"Despite high load factors these destinations have become unprofitable because of the high cost of fuel," said an Alitalia spokesman.
Alitalia flew three services a week from Milan to Sydney via Bangkok.
The Italian carrier said that between January 1, 1999 and August 15, 2000, the cost of crude oil has more than tripled from US$10.15 to US$32.05 per barrel. In the same period the cost of jet fuel went up from US30.3 to US81 cents a gallon - a rise of 268 percent.
The price increase, which has affected all airlines, is expected to cost Alitalia approximately 500 billion lira.
Alitalia will increase its frequencies to Mumbai (from three to six flights a week) and Dubai. The rationalisation will also involve European and domestic routes.
"By doing this Alitalia will be able to focus on the more profitable markets and recuperate the loss of revenue from the suspended routes," said the AI spokesman.
Alitalia's directors have called for international arbitration to sort out its dispute with KLM over the failure of their alliance.
Alitalia is refusing to reimburse the contribution of 100 million euro paid by KLM to develop the Milan Malpensa hub, and is claiming substantial damages.
Alitalia is also continuing its effort to find an international partner to develop its fleet and strengthen the network.